atradius provides that the global motor vehicle production e components will decline by 0,2% in 2026, after a 2,9% increase last year. Trade protectionism, an uneven transition to electric vehicles (EVs), and declining consumer confidence are weighing on production in most major markets.
At the regional level, the China continues to drive growth, while producers in developed markets, particularly in Old World, must simultaneously face the weakness of demand, the cost pressures and structural excess capacity. Although oil prices have begun to decline, the impact on real disposable incomes of consumers risks weighing on spending on non-essential goods, which includes new vehicles. Global auto production is expected to grow by 1,7% in 2027, thanks to a recovery in Americas, especially in the USA.
Tariffs and geopolitics put pressure on the global auto supply chain
Automotive manufacturing has become increasingly globalized, with original equipment manufacturers (OEMs) relying on a complex network of global suppliers. The industry is highly exposed to risks downside risks such as heightened geopolitical tensions, the institutionalization of tariffs, and deglobalization trends, which lead to supply chain disruptions.
Currently, electric vehicle sales are facing difficulties in the Usa, since the government has reduced tax credits for electric vehiclesIn major European markets, demand for electric vehicles is growing only slowly. In China, the transition to electric vehicles maintains strong momentum, but both the US and the EU have imposed duties punitive measures on Chinese electric vehicle imports. That said, analysts predict that global sales of hybrid and electric vehicles will account for 59% of global light-duty vehicle sales by 2030, up from 10% in 2020.
Energy transition and supplier crisis are reshaping the sector
In the 2026 automotive sector in the EU will suffer one contraction for the third consecutive year, at 0,6%, before recording a modest recovery of 1,2% in 2027. Demand conditions in the region remain subdued, as increases in real household income are offset by precautionary saving behavior and a weak labor market in several member states. Consumer confidence remains low, negatively impacting purchases of high-value goods such as cars.
I duties US import tariffs on EU-built vehicles are increasing costs for European OEMs with significant exposure to exports to Washington and will accelerate the localization of production in North America. At the same time, EU tariffs on electric vehicles built in China, ranging from 17,8% to 45,3%, offer only limited relief to European manufacturers, as Chinese manufacturers maintain a significant cost advantage. Furthermore, the risk remains that China react with restrizioni to exports of Rare lands e semiconductors.
Declining margins and suppliers at risk in the new automotive era
- investments ongoing efforts in electric vehicle platforms and battery supply chains remain a key driver of capital spending. However, uncertainty linked to transition is complicating any economic justification for rapid investments in electrification, both for manufacturers and suppliers. Furthermore, ongoing discussions and reassessments on proposal to phase out internal combustion engines starting from 2035, uncertainty in the sector will increase within the EU.
What is certain, they are dropping i margini e aumentando delays and insolvencies. An unrealistic complete abandonment of internal combustion engines is reshaping the sector and the very competitive structure of Europe: many second- and third-tier suppliers do not necessarily have the technological and/or financial means to move up the value chain, thus finding themselves forced to abandon the market in the coming years.
